The first major fraud trial stemming from the huge BCCI bank scandal ended Saturday with the acquittal of Washington lawyer Robert A. Altman, the protege of former Defense Secretary Clark M. Clifford.
The verdict in New York state Supreme Court in Manhattan was announced by the jury's forewoman, who wept as her words cleared Altman of participating in an alleged scheme to defraud the state Banking Department in order to obtain a license to operate a bank.
More serious charges of bribery, conspiracy and falsifying business records were dismissed earlier in the trial by Judge John A. K. Bradley.
The jury of four men and eight women found Altman, 46, not guilty of four counts of defrauding the regulators and submitting false records.
Prosecutors had charged that the deceit allowed the Bank of Credit & Commerce International, whose customers included drug dealers, Middle East terrorists, corrupt politicians and dictators, to secretly gain ownership of a major U.S. bank, First American Bankshares Inc. of Washington.
Bank regulators did not want BCCI to acquire First American because the international bank had a bad reputation and lacked proper controls.
Both the jury and members of Altman's family erupted in tears as the first of the verdicts was read in court Saturday evening.
Altman's wife, actress Lynda Carter, leaped into her husband's arms moments after the jurors were excused.
After the acquittal, Altman, his family and lawyers met the jurors in a courtroom hallway, and a noisy, jubilant scene ensued. Most jurors approached the Altman family or lawyers and hugged them.
"Justice would have been served if this case was never brought," a grinning Altman said as he left court.
"This man was innocent from the start, from the very first witness," said one of the jurors, Internal Revenue Service employee Ricardo Palacio. "There were no doubts in my mind."
Altman, who was president of First American, was indicted in July, 1992, along with Clifford, 86, his former law partner and the bank's chairman.
Clifford, defense secretary in the Lyndon B. Johnson Administration and an elder statesman in the Democratic Party, is recovering from heart surgery and was deemed too ill to stand trial with Altman. Charges against him are pending.
"It is more than just the end of a trial, it is the end of 2 1/2 years of a real nightmare," Clifford said from his home in Bethesda, Md. "It is a total rejection of the action by the district attorney."
The verdict marks a setback for the Manhattan district attorney's office, which was widely credited with breaking open the international banking scandal.
"We accept the verdict, of course. Justice has been served," Dist. Atty. Robert M. Morgenthau said in a statement Saturday night.
"However, our investigation of BCCI continues," he said.
The decision ended an extraordinarily complicated trial during which thousands of pages of esoteric banking documents were introduced to the jury, some of whose members struggled at times to stay awake.
During four months of court proceedings, prosecutors called 45 witnesses as they attempted to prove that Altman and Clifford helped BCCI gain illegal and secret control of First American, then Washington's largest bank holding company.
BCCI was closed by international regulators after investigations revealed massive fraud and the loss of billions of dollars in depositors' funds. Before its demise, BCCI operated in 73 nations and controlled more than $30 billion in deposits.
In an effort to broaden its power, prosecutors charged, BCCI became a "criminal enterprise," bribing central bankers, government officials and others around the world in order to gain power and money.
Regulators put the bank out of business on July 5, 1991.
In his closing statement to the jury, Assistant Dist. Atty. John Moscow argued that Altman was guilty of "deceiving people charged with keeping our banking system safe."
The prosecutor urged the jurors to find Altman guilty of defrauding bank regulators by falsifying business records relating to BCCI's role in the 1982 acquisition of First American. He charged that Altman and Clifford concealed BCCI's plan to direct and finance the takeover.
Altman won a partial victory after the case against him was completed when Judge Bradley dropped four of the eight charges against him for lack of evidence.
Prosecutors had argued that loans and legal fees paid from BCCI to Altman and Clifford really constituted bribes. The judge ruled, however, that there was no evidence of an agreement to do anything in return for the money.
But he also issued a second decision, somewhat diluting that defense victory.
He denied a request to strike all testimony and evidence on the bribery count, allowing prosecutors to argue that stock bought by Altman with no-risk loans from BCCI was part of a plan to defraud bank regulators.
In closing arguments to the jury, Altman's lawyers contended that he was innocent and charged that the Federal Reserve Board had lied to Congress about its knowledge of the loans from BCCI. The lawyers argued that Altman was being made a scapegoat for federal bank regulators who bungled the BCCI investigation.
"The prosecutors gave you a jigsaw puzzle with a load of pieces," Gustave H. Newman, the head of Altman's legal team, told the jurors. "So they gave you these pieces, and you start working out the puzzle. . . . As you're working out the pieces, there are big gaps.
"These pieces are the wrong size and the wrong shape. The picture that they make is that Bob Altman is innocent of any charges in this case."
Amplifying the incomplete-puzzle defense, Michael S. Ettinger, another defense lawyer, said the district attorney's case consisted of "a theory in search of facts."
The defense did not call any witnesses during the trial but extensively cross-examined bank and federal officials who testified for the prosecution.
Ettinger charged that federal banking regulators told Congress a "blatant lie" when they said they did not learn about the loans from BCCI to shareholders of First American until late in 1990. He argued that Altman had notified regulators in January of that year of the loans.
Newman charged that bank regulators began to search for a way to deflect criticism after it was revealed that BCCI had laundered money and had committed fraud.
The Associated Press contributed to this story.